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In last week’s blog I showed that, when we examine consumption—a commonly used measure of household welfare—the resettled households appear to be doing relatively well, and much better than before resettlement. But economic circumstances are just one small part of what really matters to households. In order to get closer to a broader picture of “well-being”, I’m going to present some evidence of how these households themselves view their lives overall and how they feel about the changes going on around them. I hope that this will provide new insights to the question of “how are the resettled people doing overall?”

The data suggest that the overwhelming majority of households are satisfied with the resettlement process, their new living conditions and environment, and are thinking positively about the future. However, they do express concerns about some of the challenges facing them. It will be important to keep listening and responding to these concerns as conditions and livelihoods evolve.

The LSMS survey, carried out in 5 rounds between 2006 and 2009, included a whole section on “subjective well-being”. The section was addressed to individuals—at least one member of each household answered questions on their perceptions of the resettlement process, the changes they have experienced and their lives in general. The answers have changed very little over time, so I present the most recent results, from May/June 2009. Although most respondents were very positive about the resettlement process, a few do say that they are upset about leaving the old village, worried about the future, or that life has become more difficult since resettlement. These responses are slightly more common among the vulnerable households. It will be important to keep monitoring the concerns of these households, and more detailed follow-up might be necessary.

However, most households are satisfied with compensation and assistance received and with life in general. The vulnerable households (please see definition of vulnerable households in my first blog) are actually slightly more likely to give a positive response to these questions—97% are satisfied with compensation and assistance. This could relate to the fact that vulnerable households have received extra support during resettlement. Or it could reflect the fact that their previous living conditions were more basic than other households, giving them a greater appreciation for the new environment.

A brief introduction to “subjective well-being”

For a long time economists thought that looking at what people do and inferring their “preferences” from their behavior was the best way of finding out about “welfare”. Recently, however, they began to wonder whether there might be more direct ways of going about this- whether simply asking people about their well-being could provide any useful insights.

Because they were economists, they still wanted to be able to put a number on whatever was going on, so they turned to the study of self-reported happiness or satisfaction, often known as “subjective well-being”, which had been pioneered by psychologists. The resulting debate has been lively. Many began to argue against the conventional goal of economic growth, citing evidence by researchers such as Richard Easterlin, who find little evidence of a link between income and measures of “happiness“, either between countries or within individual countries across time (note that this evidence is debated and many authors do find a link, although most agree that the effect of an extra dollar decreases as the person or country becomes richer). Bhutan is one country that has taken these findings to heart, and aims to maximize not income, but the “Gross National Happiness”. However, most research suggests that there is usually a link between income and happiness within a country, during the same time period, and researchers have often hypothesized that what matters to people, once they have reached a certain basic level of well-being, is “relative income”- how they are doing relative to their neighbors.

Does this research apply to the resettled households? We’ve seen that they seem to be better off in monetary terms. But they’ve also undergone the disruption and uncertainty of relocation. Their lives have changed forever. Do they themselves feel that this has been a change for the better?

About the NT2 project and socioeconomic monitoring systems

The NT2 project required the damming of the Nam Theun river and the creation of a reservoir that has flooded large areas of the Nakai plateau, leading to the physical relocation of 17 villages by April 2008. However, this physical relocation was just the first step in the resettlement process. The key challenge now is to ensure that the 6,200 people who were resettled because of the reservoir develop new and better livelihoods—and do so in a sustainable fashion—meeting the high-level commitments made in the project’s Concession Agreement (CA).

The project has invested in strong socioeconomic monitoring systems to track progress in meeting the CA commitments, although it’s far too early to judge whether the objectives have been achieved and livelihoods are sustainable. This series of blogs uses some of that evidence to give insights into how the resettlers are doing so far and the challenges they still face in improving their livelihoods. By presenting this information a bit at a time we hope to slowly build up a comprehensive picture of the resettlement process, with all its complexities, complications and surprises.